Another snap election?

25 September, 2018

Nakhil Mahra

After the losses last week, yesterday was a quiet day on the market. With no data to go on trading remained sentiment based, with Sterling still very much under pressure against its significant pairings. There were however further rumours from the UK government, more Tory party members scrutinising Theresa May, a snap election could be on the cards perhaps. With her recent performances below par, her position now looks under most pressure than any other given time. A snap election, with a no deal Brexit, will we see the GBPEUR rate fall below parity? Although a no clear favourite to challenge Mrs May from the Tory party, Jeremy Corbyn is keen to boost his vote with the younger voters, with the Labour party looking to back a second vote, a vote that will allow the UK public to decide if the deal on offer is accepted or not. The Labour party hoping to keep ‘all options on the table’.

The next 6-8 weeks are expected to be extremely volatile, further Brexit talks with the EU, a potential leadership challenge and a snap election all currently being discussed.  In the last month, we have seen a 4 cent swing in rates, the next period in this critical period in the UK could yet see GBP fall to lows not yet seen on the markets. The timing of your currency purchase becomes more significant, those of you who are risking it all and hoping to achieve 1.13 in the coming days, have you got enough in the kitty to cover for the rates at parity? Have you got an additional 10-15K to allow for the worst case scenario? Stay in touch with your CI account manager to discuss your options.

Today again will be another quiet day regarding any notable data release with only the USD CB consumer confidence at 2 pm.